Race is on for EU dairy compensation

Holstein UK chief executive Richard Jones is urging dairy farmers to apply for the EU's voluntary reduction scheme.
Holstein UK chief executive Richard Jones is urging dairy farmers to apply for the EU's voluntary reduction scheme.

Holstein UK has welcomed the EU’s voluntary reduction scheme and is urging milk producers throughout Great Britain and Northern Ireland to apply for a share of the €150m aid package.

Breed society chief executive Richard Jones is keen to highlight that the race is on, with farmers having a small window of opportunity to apply for the scheme.

“The deadline for applications is Wednesday 21st September at 11.00am. That means farmers in Northern Ireland will have to get their completed application forms, and the relevant documents, posted first class on Monday (19th)!”

The scheme is being rolled out by the Rural Payments Agency (RPA) based in Newcastle-Upon-Tyne. Farmers are required to submit postal applications - email and fax applications will not be accepted.Late, incorrect or incomplete forms will be rejected.

Representing almost 7,000 dairy herd owners, Holstein UK has been actively lobbying local government and EU officials for more than nine months, calling for compensation to support farmers who are willing to reduce production.

With more than 1,000 members in Northern Ireland, Holstein UK’s local field development officer John Martin said: “We’ve been lobbying for a compensation rate of 20p per litre, and while we welcome the current scheme, we recognise that the 12.23p per litre aid targets producers who have been adversely affected by the prolonged depression in milk price, providing compensation for those who have been forced to cut production already.

“Farmers have a choice to make. Do they continue to produce milk at an unsustainable price, or avail of the compensation to reduce supplies?”

Working in conjunction with Fair Price Farming in Northern Ireland, Holstein UK is encouraging farmers to embrace the scheme.

“Dairy farmers are entitled to the money,” explained Gary McHenry from the Fair Price Farming group. “The UK’s 7-day rolling average is currently running at 5.5% below the same period last year. That’s the equivalent of two million litres per day.”

There have been initial signs of recovery since the announcement of the reduction scheme outlined in last week’s Farming Life. “However, this will be short lived if producers do not heed Commissioner Hogan’s call to cut back on milk production. In a recent address at Virginia Show, Phil Hogan outlined that such a mechanism could be used in the future to address milk price volatility,” added John Martin.

“We have witnessed calls by local processors in recent days offering meagre incentives to break the power of choice that producers now have. This is all the more insulting when spot milk prices in mainland UK are in excess of 35p per litre due to a tightening of supplies.”

Gary McHenry added: ”The UK’s spot milk market is volatile, and it is not that long ago that prices bottomed at 8p per litre. Farmers need to act to reduce supply, as this is the only option they have to ensure a sustainable milk price.

“Cutting production across the EU will drive prices up, a move which will benefit all dairy farmers whether they decide to apply for the scheme or not. We are actively encouraging farmers in Northern Ireland to apply for the compensation available. This scheme is EU-wide, and farmers in France and Germany will represent a significant proportion of the applications. Local farmers will be losing out if they don’t apply!

“Our aim from the outset was to get a sustainable milk price, and reducing supply is the only answer in the current situation. For once farmers have a chance to control their destiny. A rise of 6ppl would represent an extra £40k per annum for a 100-cow herd.”

Dairy herd owners are being encouraged to consider the necessary requirements and ensure they submit essential documentation. Information and application forms are available from: www.gov.uk/guidance/milk-production- reduction-scheme- how-to- apply.

The voluntary scheme is open to milk producers who reduce the amount of cows’ milk they deliver to first purchasers during a three-month period, known as the ‘reduction period’. This is compared to the same three-month period in the previous calendar year, known as the ‘reference period’.

The scheme will be delivered in four tranches, but with a high uptake predicted Holstein UK is urging producers to apply for the first stage, 1st October to 31st December 2016. The rules clearly state that if the scheme is over-subscribed in one or more reference period, the remaining reduction periods will be cancelled.

To be eligible farmers must have been supplying milk to a processor in July 2016, and have been producing milk in the reference period they are applying for ie: October to December 2015.

Herd owners must plan to reduce supply by at least 1,457 litres in the relevant period. Aid will be capped at a 50% reduction in supply. The two-page application form MPRS1 must be accompanied by a July 2016 milk statement and statements for the reference period.

The application form will require farmers to include a Trade Registration Number (TRM), or a Firm Registration Number (FRN). This number isn’t compulsory. It simply allows the Rural Payments Agency to identify farmers more efficiently. The TRM number can be located on historical correspondence from RPA relating to quota regulations; while the FRN number is listed on the remittance advice the emergency payment received last year.

Successful applications will be acknowledged in writing within seven working days.